Banks charge for statements, despite record profits

February 3 2013 by Ellen Roseman

Three of the Big Five Banks are making customers pay $2 a month for mailed statements. TD kicked it off last year, BMO started Feb. 1 and CIBC will start April 1.

This practice makes many people furious for a few reasons. Here’s some of the feedback that I received after writing about it in the Star last week:

– Don’t the banks make enough money already? This is a regressive price increase imposed on those with little access to computers or confidence in their computer skills.

– Why do the bank pretend they’re concerned about the environment? It’s just a cash grab. Many people will print their statements at home, with no decrease in paper use.

– Why charge $2 a month? That seems excessive. President’s Choice Financial, which has no branches, charges only $1 a month for mailed statements.

– Why penalize customers who distrust electronic statements and prefer paper documents sent in the mail? Don’t the banks support financial literacy?

– With Internet fraud rising, couldn’t this move to electronic statements make people more confused and vulnerable?

As it happens, Bell Canada was hit was a “phishing” scam last week. Customers were getting bogus emails, saying there was a problem with their monthly payments, and asking them to click a link to ensure the payment went through.

Several readers told me Bell’s recent move to e-statements made these phony emails seem more credible.

I think the banks should use incentives to get people to switch. They try to come across as customer-centric. Instead, they look like greedy profit maximizers.

18 comments

  1. Oliver Bertin

    Feb 3 2013

    Paperless banking is a pet peeve of mine.

    CIBC gives me a bank book, which I can update any time I want at my local ATM. I find that very important for keeping track of my cheques, service charges and mysterious goings in and goings out.

    But TD Bank no longer offers bank books. I can check my balance at the local ATM, but that often leaves big questions (see $16,000 mistake below), especially with strange service charges that they insist on tacking on.

    The TD bank machine will give me a printed statement of my account activities going back over the past month or so. That is not as handy as a bank book, but okay, I guess.

    Then I discovered that TD Bank was charging me $1 every time I printed out a statement at the ATM, even though it is my bank account and my money that I am checking.

    I complained to the manager and stamped my little feet and finally convinced them to override the $1 fee. A minor victory. Hooray.

    They claim they are doing this to save trees. I am not sure about that because they are constantly asking me to sign paper receipts every time I put in or take out money — wasting paper every time.

    And I would print out the electronic statements at home anyway. So much for the trees.

    I suspect it has more to do with TD’s bottom line and credit rating!

    Where this gets important is: I checked my bank balance at the ATM a while ago and found I had $16,000 too much in my account!!! No explanation.

    I went to the bank teller and pointed this out. She gave me one of those “he’s a doddery old man” looks and told me to sign up for electronic banking.

    I persisted. Tapped my little feet and demanded to see someone who knew what was going on.

    Eventually, after many embarrassed looks, the manager admitted that a clerk at TD Waterhouse had made a mistake and given $16,000 to me instead of to the rightful owner.

    A long story, but it makes a point. If I had had a printed
    statement or a bank book, I would have noticed the mistake right away and corrected it.

    That would have saved 15 minutes of arguing with a teenage clerk and her bank manager on a busy day.

  2. FC

    Feb 3 2013

    We’ve all heard of the emails that try to trick personal information out of us.

    I just had one that was so credible that I was almost duped. It started with an email from Bell who I use for my Internet and cell phone.

    The monthly costs for both are invoiced to my credit card.
    That’s why it was surprising, yet credible, when I received an email saying that Bell could not process payment for last month’s statement.

    I thought that perhaps the credit card had expired and I had not updated it.

    So, I clicked on the provided ‘log in’ link on the email without hesitation to see what this email was all about. The log in screen looks authentic.

    The next screen that came up also looked authentic, but after I scanned the required fields, I thought that Bell has no right to require such personal and detailed information.

    I took a screen shot and was going to send it as an attachment to an email to the Privacy Commissioner, Jennifer Stoddart, with a copy to the CRTC.

    That’s when I noticed the URL was not Bell.ca as I would have expected.

    After digging thorough several genuine Bell.ca web screens, I got a phone number that did its best to keep me from speaking to a real person.

    But being really angry by now, I fought on and I finally got to a real person at BELL Mobility, I think. He was able to confirm that there was no outstanding balance on my account.

    When I told him of my suspicions, all he said was to make sure to use only http://www.Bell.ca if I want the Bell website.

    Is it too much to expect these days that if you have a billing issue, you can talk to someone about it?

  3. Industry insider

    Feb 3 2013

    Receiving paper bills is a customer’s right. We don’t all manage our finances and bills from our iPads or laptop.

    As a participant in this industry as a service provider for both electronic and paper documents, I find these service charges interesting.

    The average bank or telecommunications company pays a service bureau about $0.05 for an electronic statement and about $0.10 for processing of a paper statement.

    You need to add another $0.08 for the paper, envelope and marketing inserts and $0.63 for postage.

    All companies that charge $2.00 per statement are in fact making $1.19 per envelope.

    Paper statements have become the cash cow of the century, generating potentially up to $60 million dollars per month per bank. I used a conservative estimate.

    This sickens me. As a service provider, we are lucky if we make $0.01 margin per paper statement and maybe $0.02 margin per electronic statement.

    The stories about the environment, save a tree, go green, are all white washing. Someone needs to call out the true wrongs that are being committed by companies claiming to do the right thing.

    If you want to check my math, ask a telecommunications company or a bank to tell you the true cost per paper statement or the true cost per electronic statement.

    The numbers provided can be verified through the likes of consultants, such as Madison Providers (who produce an annual industry price list).

    I know that change is inevitable and that all consumers should have a choice of how they like to receive their information.

    I would be fine with companies charging the same for delivery of both services. That would be strange, though, since we have all received our paper documents at no charge for over 50 years.

    With record profits across all banks, I wonder why they need to make $1.19 per paper statement. I think that is the real story and that it should be told.

    It is interesting that whenever a bank, insurance company or a telecommunications company needs to get a document to all of their customers, they always do it by mail.

    Why? Because they can count on it being opened read and received. I do not work for Canada Post, but they get the job done.

    The same cannot be said for electronic documents. The current read or retrieve rates are less than 15 per cent.

    I have seen these numbers and heard firsthand from billers quoting these type of retrieval rates for electronic documents.

    If we do not read the documents, all the better. If they make us pay for these silly communications, what a win.

    What irritates me most is the quiet collusion that is going on among these companies. Once all six big banks do it, the consumer is done. Each bank picks up profit for charging for something that was once the consumer’s right to receive at no charge.

    The three big telecoms have figured out the same strategy. Lead with the environment, whine about higher postage cost (about $0.02 per year, not anywhere near $1.20 per package) and then hit everyone with the same $2 charge.

    The pricing study to validate the numbers I provided is generated by Madison Advisors. They are a U.S. based firm that supports both in-house and external service bureaus selling paper and electronic services to banks, insurance, telecommunication and government organizations.

    Over 10 companies across North America participate in these studies to help ensure we are market competitive. My math is correct.

    It costs a biller between $0.75 to $0.85 to print and mail a paper document, including materials and postage. Charging $2 per statement is a car jacking.

    Thanks for fighting for the little people out there.

  4. RB

    Feb 3 2013

    It is ironic that Canadian banks cite a need to ‘offset costs’ as the reason for introducing additional fees for clients who prefer paper account statements.

    This happens when their ranking by revenue in $millions is top 5 out of 6 Canadian brands. (Globe and Mail Report on Business magazine, January 2013, page 29).

    The numbers clearly indicate that the banks are well able to afford the cost of offering clients a choice within the existing service fee structure.

    If banking online is the way forward, why the extended branch hours on weekdays, Saturday and now Sunday also?

    Just asking….

  5. LS

    Feb 3 2013

    I have been charged $2 a month by Bell for receiving a
    paper bill since they instituted this charge.

    I am a senior (aged 61) and have called about this many times, only to be told that, because I have made the choice to receive my bill by mail, I will continue to be charged this fee.

    Yet, on my computer, they are sending me a monthly “e-bill” as well!

    I detest calling Bell, because you’re forced to go through several menus, the “voice director” often errs, you are on hold for countless minutes and often routed to the wrong department.

    The final insult is that, at the end of your request for help, they attempt to sell you a bundle, or change your service, anything to rook extra $$$$ out of you!!

  6. SS

    Feb 3 2013

    I got Bell to refund $24 because I agreed to email statements. They have my email address and the bill comes automatically.

    You might advise readers to try it and see if they’ll still do it.

    Don’t remember how I came up with asking for a refund, but certainly no one at Bell suggested it.

    The person I dealt with didn’t really understand what I was talking about, but I think she did it as a loyalty issue.

  7. JH

    Feb 3 2013

    I am a retired stockbroker and find your comments hit the target.

    Personally, I have experienced interest penalties on my Visa account due to my going paperless and missing a statement date. I have gone back to paper.

    There is a larger issue that the banks have avoided discussing.

    I have been involved with many estate executors trying to locate assets and distribute them to the beneficiaries. For most executors, it is a new responsibility and they have few prior experiences to fall back on.

    With PAPERLESS, it is very difficult to detect if there is an asset out there.

    Normally, an executor will get a statement or bill in the mail that will tip them off that there is an asset.

    Now with interest rates so low, most bank accounts do not generate a T4 tax slip, another clue to an account.

    The banks will sit on these accounts of deceased depositors until they are forced to transfer the funds to the Bank of Canada. Odds are the beneficiaries will never see the money.

    To pay for PAPER is a small cost compared to losing the asset in the digital cloud.

    There is no requirement that the bank reminds people of their account. In fact, it is in the financial institutions’ interest to sit on the money.

    Yearly, I do up a balance sheet with account numbers and contacts for my family. I hope they can find most of what is rightly theirs.

    The problem in the future for executors is a sleeping dog that will have a bad bite.

    I think that this Paperless revolution is going to cost consumers greatly while improving Banks bottom lines, not a fair trade off!

  8. YR

    Feb 3 2013

    I see you are tackling paper statements, specifically the monthly fees banks look geared up to begin charging their clients for letting them know how much money they have in their accounts, and what transactions went through since the prior statement.

    To this, I say, get your flashlights ready. Soon, when you go grocery shopping in the evening, Loblaw, Metro, Sobey’s et al, following this model, may decide it could make good business sense ($$$ for them…) to turn off the lights or let (make!) their patrons pay for the electricity. Why not?

    I have had discussions with a cell phone provider who was doing the same thing – charging for statements.

    Two choices here: a) pay the statement fee or b) get e-mail billing, which, if it somehow gets buried in your inbox, will enable the carrier to charge you 20% + interest on the overdue balance.

    Result: Win win from a profitability standpoint!

    So now, take note, banks, cell Phone companies, and soon maybe grocery stores, will all enter ancillary businesses.

    They will be charging customers for every little bit of any amount of work or costs they incur as a result of their primary activities.

    Is that right? No. Billing, in the case of the cell phone situation, is the clearest direct by-product of providing me cell phone service and getting to charge me for it.

    I never went to them and said, “You have that great service, I pay $2 and you send me paper. I want in.”

    I asked for cell phone service. Part of them providing that service is their cost of doing business, INCLUDING billing me (not at an additional charge post-facto!).

    All-in, one can only hope such practices that look just like another money grab are tackled properly by consumer advocates and even if needs be, the government body responsible for protecting Canadians against abusive business practices.

  9. RB

    Feb 3 2013

    I bank with TD for a personal account and a business account. I had a call last year, asking me to go to electronic statements on my business account.

    Currently with my monthly printed statements, I get front and back images of the cheques I wrote from that account.

    I asked the caller from TD if I went electronic, would I still get those. They couldn’t answer me.

    Then I asked if I didn’t and needed a copy of a cashed cheque for proof of payment, then how much was it? I was told it would be $2.00 per cheque.

    I explained to them that with a business account, I need copies of all the cheques. So at 5 cheques per month, that would be $10 extra. How would that be better for me? They were questioning the option themselves.

    So I stuck to getting a monthly paper statement on both personal and business accounts.

  10. WB

    Feb 3 2013

    I have been involved with transaction mail production for decades, and with the electronic delivery of them for over 15 years.

    If you are planning to follow up on this, you should ask the banks about compliance with Part 2 of PIPEDA, Electronic Documents.

    In Section 50, it sets minimum standards for issuance of legally acceptable electronic documents. One thing that is required is mutual consent.

    Given that the banks did not charge for the paper statement before, is it OK to introduce a charge to force consent?

    Also, does the way they deliver the electronic document meet the requirements of the Act?

    For example, are the documents electronically signed and can they prove date of issue and origin?

    http://laws-lois.justice.gc.ca/eng/acts/P-8.6/page-18.html#h-21

  11. CB

    Feb 3 2013

    I received the email below today.

    Without responding to the link, I have confirmed with Bell that this is a phishing type scheme.

    The email did not come from Bell and my account is in good standing.

    The person I spoke with at Bell indicated that email has been widely circulated. Bell indicated that they have notified the police and are investigating.

    Increasingly, companies are turning to online billing rather than paper billing.

    I’m passing this on to you since I am concerned that many people will respond to the link and give out banking information.

    From: Bell Canada [mailto:confirmation@bell.ca]
    Sent: Wednesday, January 30, 2013 1:31 PM
    Subject: Bell Canada Transaction ERROR 15894037

    30 January 2013

    Log in

    Your monthly bill cannot be processed.

    We recently wrote to inform you that your last payment was declined. This is your second notice. We were unable to process your payment for your Bell Service.

    Due to this, to ensure that your service is not interrupted, we request you to confirm and update your billing information.

    You can update your billing information online simply by clicking Log in button.

    Forgot your user name and password?

    FAQ | Legal | Privacy | Moving | bell.ca

  12. Albert Lee, Bell spokesman

    Feb 3 2013

    Like many other trusted companies, Bell’s brand is sometimes used in order to lure or con victims into unwittingly providing sensitive personal information to criminal elements through phishing scams like this one.

    We’re aware of this one and our security team has already taken steps to stop it, including dealing with the hosting company through which it has been operating.

    Customers should remember that Bell won’t email you to ask for personal information.

    Customers can also compare web links in the email – i.e. even if it says ‘Bell.ca’ or another big-company name in the email, by placing the mouse/cursor over the link you can see the actual web link.

    Customers can learn more about phishing here:

    http://support.bell.ca/internet/security/how-do-i-use-email-safely?step=4

    Those who believe they are the victim of any scam should contact authorities right away, of course.

    Customers who believe they have received a phishing email using the Bell brand should forward it to us at:

    abuse@bell.ca.

    We take these matters very seriously and investigate immediately.

  13. JD

    Feb 4 2013

    If you ever run out of interesting topics for your column, here is a caution you could give: Do not schedule post-dated bill payments on your bank’s website.

    Most people pay bills online these days, but few realize that post-dated payments can be cancelled by your bank, without it notifying you, even if there are ample funds in the account to cover them.

    A few months ago, using my debit card, I logged on *****’s site (one of the big five Canadian banks) and scheduled three bill payments to be made a week later.

    Two days later, these payments were all cancelled by the bank. As I only noticed this two weeks later, this resulted in three late bill payments.

    In addition to running up late-payment fees, this damaged my credit record.

    When I asked the ***** bank why it had done this, I was told it was done when they had processed the activation of the new chip-equipped debit card they had sent me.

    As its number was different from my old one (16 digits rather than 13), all transactions made while logged on using the old card number were cancelled.

    No mention was made of the advisability of letting me know.

    After I complained using some of the tips you gave in a recent column, ***** did refund my late-payment charges.

    However, since this is the second time ***** has done this to me, I no longer schedule post-dated payments.

    I assume that if I had pre-authorized payments, they would have been wiped out too.

    Keep up the good work.

  14. Jane Savers @ The Money Puzzle

    Feb 9 2013

    My TD Canada Trust statements are not emailed to me but are available as part of the online banking package.

    I don’t want or need any extra paper in my life but I think the option should continue to be available in some form for those who need it. Perhaps they could move to quarterly printed statements.

  15. lew

    Feb 14 2013

    “Despite record profits…” is such a cliched phrase. Charging people for services is how the banks make profit in the first place. They’re under no obligation to charge ‘cost’ for anything.

    Personally, as somebody who loves electronic statements, I’m glad I don’t have to subsidize the cost of everybody who doesn’t want to move into the digital era.

  16. James

    Feb 19 2013

    To lew:

    So you love electronic statements, therefore everyone should, eh?

    And who is being “subsidized”? By TD introducing fees to send out paper statements, will you (as an electronic user) be receiving a rebate now?

    God help us, I wish people would think before they type a bunch of hogwash!

  17. Lew

    Feb 22 2013

    Didn’t say they should love it, I said they should pay for the cost associated with the service.

    “Subsidize: Pay part of the cost of producing (something) to reduce prices for the buyer.” That would be me, in the absence of a fee, paying part of the cost of producing your paper statement.

  18. James

    Feb 27 2013

    Well no, Lew, you still have it backwards. I’d explain it to you, but (based on experience) I don’t argue with fools anymore.

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